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Possible Restrictions
on Revenue Sharing: In certain situations, there
may be a threshold at which restrictions on the amount of
tax revenue that Canada is willing to forego in sharing
its tax room with First Nation governments that enact tax
laws applies. However, any such restrictions are not likely
to reduce further revenue sharing to zero as revenues continue
to increase beyond the threshold level where the restriction
takes effect. This situation is not expected to be a factor
for the majority of First Nations and as such not reflected
in the model.
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Property tax regime: The
FFO contemplates a separate treatment of property tax revenue
in order to take into consideration taxes collected from
non-members. It is contemplated that those property tax
revenues collected from non-members and not expended on
local services would be subject to own source revenue consideration.
This approach has been described as ‘netting out local
services’.
As this approach has not yet been fully developed, the model
does not ‘net out local services’ from property
tax revenue. |
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Floor on transfer: The
FFO contemplates a lower limit on the transfer that a First
Nation would receive from other governments. This option
contemplates a continuing role for federal funding to the
provision of Agreed-Upon Programs and Services regardless
of how much own source revenue that the First Nation is
able to generate. The determination of transfer floor has
not yet been articulated and will be the subject of negotiation
with individual First Nations.
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